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Betterment's new CEO spices up baked potato robo menu with self-directed crypto allocations; one guru calls it a 'square peg' in round hole, but Morningstar analyst sees 'leapfrog' potential

New York City robo-advisor CEO Sarah Levy bought 'Makara' after 90% demand it; they can choose crypto for 100% of portfolios but must pay a fee of 100 basis points.

Author Oisin Breen February 15, 2022 at 2:39 AM
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Mike Reust: It is the intent to sunset the brand in the future.


Brian Murphy

Brian Murphy

February 17, 2022 — 3:25 AM
There are a number of mis-conceptions here. First, crypto trades pretty homogenously at present - meaning diversification is pretty close to meaningless. So whether you hold 100% BTC or a pack of 30 different cryptos, your returns are going to be very highly correlated. Second, all of the coins that exist today except BTC are "tokens" with NO intrinsic economic value. Holding one Solana token doesn't give you ownership rights to anything except governance issues. It's not an "asset" at all if on a decision one can mint an unlimited supply of them! Maybe more importantly - what exactly do the Betterment clients want out of a "crypto product"? Is it the ability to speculate, a store of wealth, a source of wisdom on these new assets, etc.? That should dictate what the Betterment product looks like - but instead of that they just make a generic acquisition of a company with a poorly conceived strategy, and bolt it on to the mother ship. What a joke. I suspect the real problem is that the good folks at Betterment, including Ms. Levy, don't know anything more about BTC and crypto-currency than the supposed clients and advisors they purport to serve. Like ESG last year, crypto is the latest meme of the day - so Betterment does what any fast follower with a pocket-full of money does and makes a crappy acquisition.

Related Moves

August 14, 2021 at 2:20 AM

Second Betterment exec departs as new CEO Sarah Levy orients to her first month on the job and is confronted by personnel matters

Chief operating officer Dustin Lucien is the latest to leave the New York City robo-advisor, one of at least eight positions open as it prepares a push across multiple business lines to ignite growth.

January 19, 2021 at 6:32 PM

Jon Stein ousts himself as Betterment CEO and taps Sarah Levy, who joins an exclusive club of top women executives, with a mission -- an IPO

The co-founder of the New York robo-advisor headhunted the ex-Viacom brass through Harvard professors on the down low to ostensibly scale operations.

December 8, 2020 at 5:27 PM

Mentioned in this article:

Betterment, LLC
Financial Planning Software
Top Executive: Jon Stein

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